Castlenoid is a breakout-type game in which each level represent a castle to destroy. You move the paddle with your mouse and shoot the ball by left-clicking on the screen. Some bricks take only one hit to destroy while others can take up to three hits as is the case for towers. The ball will bounce off water and trees without damaging them. Each time you bounce off a destroyable brick, the combo counter is incremented, multiplying the score you get by its number. If the ball hits the paddle without having hit a brick, the counter goes back to one. When you destroy a brick, sometimes a powerup will fall down. If you catch it with your paddle, it will have different effects depending on its appearance, from covering your paddle in a sticky substance to increasing the ball's speed.

During gameplay you can pause by hitting "P" or "Escape". If you click on "Quit Game", it will have the same effect as a Game Over.